What must a contract contain in order to be legall

MORAN V UNIVERSITY OF SALFORD (1993)

This is showing the objectivity principle in practice.

In this case, The University of Salford sent Mr Moran a letter offering him a place on their Physiotherapy course, which Mr Moran accepted. The University then claimed that they had not meant to offer him a place and that the offer was a result of a clerical error. The Court of Appeal held that there was a clear case for saying a contract had been formed as the obvious and apparent intent was to offer Mr Moran a place. OBJECTIVITY. Even though subjectively they had not intended to, objectively they had.

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Bilateral and Unilateral contracts

A BILATERAL CONTRACT is an EXCHANGE OF PROMISES between two parties. Once the promises have been exchanged the contract is valid. OBLIGATIONS and RIGHTS are given to BOTH PARTIES - BOTH promising to do something.

UNILATERAL CONTRACTS are a PROMISE IN RETURN FOR AN ACT. The person performing the act does not promise to do so and is under no contractual obligation. Only ONE PARTY PROMISES to do something. Pay £100 to walk from London to York, classic example. Not obliged to walk to York but will be obliged to pay £100. OBLIGATIONS ON ONE SIDE ONLY.

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GIBSON V MANCHESTER CITY COUNCIL [1978]

The council offered council houses for sale to their tenants. The claimant sent in a form, asking the price. The council responded saying they "may be prepared to sell" for a stipulated price and he sent in an application form, then proceeded to undertake repair work to the house working under the assumption that he had a binding contract. Gibson was placed on a list of former tenants who now owned their houses, where responsibility for maintenance lay with the owner.

However, the council then changed hands to Labour, who changed their policy on housing and only kept the contracts that had already gone through. They argued that there was no binding contract with Gibson to sell the house. It was held by the Court of Appeal that there was a contract in place with Lord Denning arguing that offer and acceptance need not always be clear.

This was overturned by the House of Lords. who held that there NEEDED TO BE CLEAR OFFER AND ACCEPTANCE. They held that the coucil's letter saying they "may be prepared to sell" was NOT AN OFFER and therefore C's application was the offer which was never accepted by the council. There was therefore no contract.

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STEVEN V BROMLEY & SON [1919]

An offer is an indication of a party's willingness to enter into a contract with the party it addressed, as soon as the terms are accepted. It indicates a willingness to be LEGALLY BOUND. Promise to do something. An offer can be made to AN INDIVIDUAL, A GROUP OF PERSONS, OR TO THE WORLD AT LARGE.

An offer can be made EXPRESSLY OR BY CONDUCT. The offeror must express a preparedness to COMMIT. The terms must be clear, definite and unambiguous.

An offer MUST BE COMMUNICATED TO THE OFEREE. An offeree cannot accept something they do not know about. An offer can be made by ANY METHOD.

This case demonstrates how an offer can be IMPLIED FROM CONDUCT. Such as filling a car with petrol from a petrol station.

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HARVEY V FACEY [1893]

An offer must be clear and unambiguous and definite.

In this case, Harvey telegraphed Facey saying "Will you seel us bumper hall pen? Telegraph lowest cash price'. Facey responded saying "Bumper Hall Pen lowest £900". Harvey telegraphed his agreement to buy at that price but Facey did not respond. It was held that there was no contract as Facey's reply had merely been a response to a request for information and NOT an offer. The agreement to buy was an offer which was never accepted.

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CARLILL V CARBOLIC SMOKE BALL CO (1893)

The offeror must EVINCE AN INTENTION TO BE LEGALLY BOUND. He can make an offer to the whole world if he so desires. Sometimes a preliminary labela ttached to communication may mean it is not decisive, eg, "I am prepared to offer you". But no offer will be infered from conduct which is reasonably susceptible of more than one interpretation.

In this case the defendants were the creators of the Carbolic Smoke Ball. They put an advertisement in newspapers which included the wording "£100 reward will be paid by us to any person who contracts the influenza after having used the smoke ball three times daily for two weeks. £1,000 is deposited in the bank to show our sincerity in the matter." Mrs Carlill, the plaintiff, bought a smoke ball on the faith of this advert and used it three times per day for six weeks when she contracted influenza. She sued for her £100. The company, probably having to deal with many similar claims, argued that the advertisement did not give rise to lega liability, arguing they cannot have contracted with the whole world. It was held that they had MADE AN OFFER TO THE ENTIRE WORLD and Carlill successfully sued Carbolic Smoke Ball as their advertisement was held to be an OFFER. A clear intention to contract was portrayed in the advert.

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Invitations to treat

An offer demonstrates an INTENTION TO BE LEGALLY BOUND if the other party accepts the terms of the statement.

An INVITATION TO TREAT contemplates FURTHER NEGOTIATIONS taking place before a contract is formed. It is an invitiation to make an offer, rather than being an offer itself.

Following an invitation to treat, the other party can make an offer and the person who made the invitiation to treat can choose to accept the offer.

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FISHER V BELL [1961]

Flick knives were displayed in a shop window. It was a criminal offence to offer flick knives for sale. It was held that there was no offence committed, as DISPLAY OF GOODS IN A SHOP WINDOW IS SIMPLY AN INVITIATION TO TREAT.

Dsiplay only constitutes an invitation to treat, either in shop window or on shop shelves. The customer makes the offer and the shop chooses whether to accept the offer.

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PHARMACEUTICAL SOCIETY OF GREAT BRITAIN V BOOTS CA

The sale of poisons was prohibited apart from when the sale was under the supervision of a registered pharmasist. The claimant was a pharmaceutical society which had a duty to enforce the Act. They argued that the display of poisons on the shelves in Boots Cash Chemist was an offer which was accepted when the purchaser put the goods in their basket, and therefore the sale took place not under the supervision of a registered pharmacist, which was contrary to the Act. The Court of Appeal however held that the display was merely an invitation to treat and it was the prospective purchaser who made the offer to buy at the till, accepted by the cashier. The Act was therefore not infringed as there would be a qualified pharmacist present at the till.

If display constitued an offer, there would be more customers making offers than shopkeepers would be able to supply. It would also prevent the customer from changing their mind.

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PARTRIDGE V CRITTENDON (1968)

A similar rule to shop display applies to advertisements.

In this case, the defendant was prosecuted for offering for sale a wild bird which was against the law. He had placed an advert stating "Bramblefinch *****, bramblefinch hens, 25s each." The Court held that this was an invitiation to treat and NOT an offer.

Just because the party suggests a price does not mean that they have made an offer.

HOWEVER, IF THE ADVERT DISPLAYS A WILLINGNESS TO BE AUTOMATICALLY BOUND TO THOSE WHO PERFORM THE ACTS IN THE ADVERT,as in Carlill v Carbolic Smoke Ball, it will be held to be an offer.

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GRAINGER & SON V GROUGH [1896]

A foreign wine merchant got orders by circulating a price list, and customers responded by placing orders. It was argued that no contracts were concluded in the UK for tax reasons. The transmiision of a price list was held to be an invitation to treat and not an offer.

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LEFKOWITZ V GREAT MINNEAPOLIS SURPLUS STORES (1957

The defendant published an advert in a newspaper: "Saturday 9am sharp, 3 brand new fur coats worth $100 dollars. First come, first serve $1 each.'

The claimant was refused sale on two occasions. he sued for breach of contract. It was held that the offer for the sale was clear, definite and explicit, leaving nothing open to negotiate, making it an offer rather than an invitation to treat.

Generally, while advertisements of UNILATERAL CONTRACTS are often held to be OFFERS, such as Carlill, the courts are MUCH LESS WILLING TO FIND THAT AN ADVERT OF A BILATERAL CONTRACT IS AN OFFER, IT IS MORE LIKELY TO BE AN INVITATION TO TREAT.

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THORNTON V SHOE LANE PARKING (1971)

The claimant drove to the entrance of a garage after receiving a ticket from the machine and parked his car. The offer was made when he paid his money, and the acceptance when he recieved his ticket.

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HARRIS V NICKERSON (1873)

AUCTIONS WITH A RESERVE PRICE

An advertisement was placed in a newspaper that office furtniture would be sold by auction at a specified place. The claimant read the advertisement and attended the auction to buy the furniture but it had been withdrawn from the sale. The claimant sued for wasted expenses and attended the auction to buy the furniture but it was held that there was no contract until his bid was accepted. The advert was merely a declaration of intent.

The bidder therefore makes the offer, and the offer is accepted by the auctioneer bringing down his hammer,as stated by the Sale of Goods Act 1979. The auctioneer acts as an agent for the vendor so that when the hammer is brought down, a contract is formed between the highest bidder and the vendor. Until the hammer is brought down, the bid may be retracted. Any bid amounts to an offer which enables the auctioneer to accept or reject them.

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BRITISH CAR AUCTIONS V WRIGHT (1972)

Any bid amounts to an fofer and the auctioneer can accept or reject them.

IF THERE IS A RESERVE PRICE, THERE IS NO SALE AND NO CONTRACT FORMED IF THE BIDDING FAILS TO REACH THE RESERVE PRICE.

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WARLOW V HARRISON (1859)

AUCTIONS WITH NO RESERVE PRICE

When no reserve price is stated, this means that the auctioneer, no matter how low the bid is, must sell to whoever bids the highest. Should the auctioneer refuse to sell to the highest bidder, he or she may be in breach of contract.

In this case, the owner intervened in bidding to prevent a horse being knocked down at a low price. This established a reserve price. Otherwise, the bidder would have successfully sued the auctioneer.

Putting up for sale without a reserve is both an invitation to treat and a collateral offer to whoever proves to be the highest bidder.

The offer is accepted by making the highest bid. When the offer is actually made is an unanswerable question. The offer is, though, accepted when the highest offer is made if there is no reserve price.

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BARRY V HEATHCOTE BALL & CO (COMMERCIAL AUCTIONS)

Two lots of machinery were advertised without reserve and were withdrawn by an auctioneer from auction. The claimant had made bids of £200 for each lot and was the highest bidder. They were refused by the auctioneer who sold them on separately. The claimant sued and argued that the auctioneer was legally obliged to accept his bid.

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SPENCER V HARDING (1870)

TENDERS.

The general rule is that if someone invites parties to tender or bid, this indicates that he is inviting the parties to make offers for him to consider. His statement is an invitation to treat and not an offer. THE TENDER ITSELF IS THE OFFER WHICH IS THEN ACCEPTED. There is therefore NO OBLIGATION TO ACCEPT THE HIGHEST TERMS.

In this case the defendants sent out a circular offering tender, and it was held that this was not an offer as there were no words stating that the highest bidder would be the successful tender. However, if the advert had stated that they would sell to the highest bidder, the advert would have constituted an offer to sell to the highest bidder, accepted by the highest bid. It would be a unilateral offer automatically accepted upon highest bid.

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BLACKPOOL & FYLE AERO CLUB V BLACKPOOL BC [1990]

A statement inviting tenders may be construed as an offer with slightly different terms. Eg, if a bid is properly submitted in accordance with the terms of the invitation it is promised that the bid will be considered. It is an offer to consider bids but not an offer to accept the bid.

In this case, Blackpool BC invited BFAC and 7 others to submit tenders. The invitation stated that the council did not bind themselves to accept any tender received after the last date and time specified. The tender deadline was midday and BFAC posted their tender at 11am in the town hall postbox supposed to be cleared each day at noon. However on this day it was not and BFAC's tender was dismissed. The Court of Appeal held the council to be in breach of contract. While under no obligation to accept a particular tender, the invitation provided that as long as BFAC conformed to the terms, they were entitled to have their tender considered.

Such an offer will only be applied in limited circumstances though because contracts should not be lightly inferred

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What is a fixed bidding sale/referential bid?

A fixed bidding sale is an invitation of confidential offers and undertaking to accept the highest bid. In a fixed bidding sale, bids are made blind. An auction runs the risk of a lack of competition to drive the price up, whereas fixed bidding sales compel bidders to declare their best offer.

What if a referntial bid is made? A referential bid is when you say you will pay X amount more than another bid, therefore not specifying an amount.

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HARVELA INVESTMENTS LTD V ROYAL TRUST CO OF CANADA

The defendant invited the claimant and the second defendant to make confidential bids for shares, promising to accept the highest bid. The claimant bid a certain amount of money while the second defendant bid a certain amount "or $101,000 in excess of any other bid you may receive, whichever is the higher". This bid was accepted, and a contract of sale was entered into for the shares. The claimant succeeded in aclaim that the defendant was contractually bound to transfer the shares to them. The invitation constituted an offer to enter into a contract with the highest bidder, AND the bid MUST BE A FIXED BID. The second defendant's bid must therefore be discounted.

Because a fixed bidding sale requirs a blind fixed bid, referential bids may not be allowed. If both made referential bids, the sale would not be quanitfiable. It also denies B the opporunity to purchase as they could never win - their bid only quantifies the other bid. It also frustrates the purpose of the bid.

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BYRNE V VAN TIENHOVEN (1880)

REVOCATION OF AN OFFER.

In order for an offer to be effective IT MUST BE COMMUNICATED TO THE OFFEREE. The offeree must be aware of the offer in order to accept it.

AN OFFER MAY BE REVOKED AT ANY TIME PRIOR TO ACCEPTANCE. THIS MUST BE BROUGHT TO THE ATTENTION OF THE OTHER PARTY to make it effective. SO, A WITHDRAWAL MUST GENERALLY BE COMMUNICATED TO THE OFFEREE BEFORE THE LATTER ACCEPTS IT so that they can validly withdraw the offer, protecting freedom of contract.

In this case an offer was made on 1st of October by the defendants. They wrote on 8th to revoke this offer. On 11th the claimants received the offer and accepted the same day, also posting a letter on 15th confirming acceptance. They then received the withdrawal. It was held that this revocation was invalid, because acceptance had occurred prior to the revocation and therefore they could not revoke the offer.

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DICKENSON V DODDS (1876)

REVOCATION NEED NOT BE COMMUNICATED BY THE OFFEROR.

Dodds offered to sell Dickinson his house and keep the offer open til 9am Friday. He withdrew the offer on Thursday, but Dickinson tried to accept the offer at 7am Friday. The Court of Appeal held that the offer had not been accepted by Dickinson because it had been validly withdrawn before he could. Even though Dodds had not directly told him, the claimant knew that he was no longer minded to sell and it was clear, and so the revocation was held to be sufficient by third party commuication.

A revocation can be effected by fax or email within normal business working hours even if not read until some time later. WHEN IT WOULD NORMALLY BE READ IN ORDINARY COURSE OF BUSINESS.

An offer to the public at large may be revoked if sufficient steps are taken to notify those to whom it was made, eg, posting on town notice board, post again, revocation done.

REVOCATION MUST OCCUR PRIOR TO ACCEPTANCE AND BE SUFFICIENTLY COMMUNICATED. Where there is a unilaterla contract, it is IRREVOCABLE ONCE PERFORMANCE IS COMMENCED.

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HYDE V WRENCH (1840)

An acceptance is a clear indication of the offeree's unqualified agreement to the terms of the offer in the manner set out by the offeror. OBJECTIVE INTENTION. IF AN ACCEPTANCE SEEKS TO VARY TERMS IN THE OFFER, I IS NOT A VALID ACCEPTANCE.

Without valid acceptance, there is no binding agreement. It must be an unequivocal and unconditional acceptance and effective communication.

In this case, Wrench offered to sell Hyde his farm for £1,000 but Hyde responded saying he would give him £950. After Wrench rejected this suggestion Hyde attempted to accept the original offer of £1,000 but Hyde refused. H's offer of £950 was a counter offer, which was also a rejection of W's offer of £1,000. The £1,000 offer was therefore terminated, and could not be accepted at a later date.

NO ACCEPTANCE, NO CONTRACT.

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TAYLOR V ALLON [1966]

Must the offeree know of the offer in order to accept it?

In BILATERAL contracts acceptance in ignorance of the offer would expose the offeree to obligations they didn't agree to, and so they must know of the offer in order to accept it.

In this case, a temporary cover note on insurance documents constituted an offer to remain insured. Driving was held not to be acceptance of that offer as there was no evidence to show that the defendant knew of the note.

In UNILATERAL contracts the offeree makes no promise and may therefore not be exposed to any burden. Gibbons v Protctor. Should you be able to claim for a reward in helping to apprehend a criminal not knowing the reward? No bargain? No contract?

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WILLIAMS V CARWARDINE (1833)

An advert offered a £20 reward for information leading to the arrest of Carwardine's murderer. The offeror was the deceased's brother. C was assaulted by Williams and, believing she did not have long to live, made a voluntary statement that offered evidence for Williams rrest. She then claimed the reward. It was held that she had fulfilled the condition laid down in the advertisement, and so her motives for doing so were irrelevant.

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R V CLARKE (1927) Australian case

Areward was offered for information leading to the arrest and conviction of the murderer of a police officer. C supplied the information but not for the purposes of the reward. It was held that there was no reward.

However, this is an Australian case. Williams v Carwardine is English law.

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TINN V HOFFMAN & CO (1873)

An acceptance must be externally manifested. A mere meeting of minds is not enough. The offer must be mirrored by a second communication or conduct agreeing to its terms.

In this the claimant asked for the defendant's lowestprice for 800 tons of iron. Defendant offered 69s per ton. C asked if the price would be lower for 1200 tons. D wrote stating the price would be the same. C then wrote accepting 800 tons on D's terms, but requesting a further 400 tons at 68s. The two letters crossed in the post. D accepted C's order for 1200 tons but at 69s per ton only. The defendant then refused to delvier anything after not hearing back. C sued alleging a contract for the 800. It was held that there was no contract as both letters were offers, neither of which were accepted. No contract.

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Communication of acceptance

ACCEPTANCE IS ONLY ACCEPTANCE WHEN IT HAS BEEN COMMUNICATED BY THE OFFEREE TO THE OFFEROR. The offeree must take ALL REASONABLE STESP to bring the acceptance to the attention of the offeror.

Acceptance MUST GET THROUGH TO THE OFFEROR. If an acceptance goes astray, this is the problem and responsibility of the offeree. The offeror cannoot be binded into a contract he knows nothing about

If the offeror imposes limits on how to accept the offer, these must be resepcted. But in the absence of any contrary instructions, it is permissible for the offeree to employ the same method of transmission used by the offeror. If there is an indication as to the required method, this may be the only allowed method and so compliance is mandatory.

OR, it could be an indication of the REQUIRED SPEED OF ACCEPTANCE without stipulating an exclusive mode of acceptance.

There is no conttact if the parties are face-to-face and the acceptance is drowned out, or spoken too softly to be heard. The communication IS permitted to be waived by the offeror. For unilateral contracts, there is an implied waiver that the offeree need not inform the offeror that performance is commencing

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MANCHESTER DIOCESAN COUNCIL FOR EDUCATION V COMMER

D offered to buy land from C on C's form which stated that the person whose tender is accepted shall be the purchaser and shall be informed of the acceptance by letter. Acceptance was notified by C's surveyor to D's surveyor. It was held that this was sufficient communication. The method of acceptance was not stipulated to be the sole and exclusive method - as long as the method was not disadvantageous.

Also, because the requirement had been stipulated by the offeror, they had the ability to waive it.

As long as the offeror is in no way prejudiced by the form of acceptance, it is likely to be good.

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FELTHOUSE V BINDLEY (1862)

CAN YOU ACCEPT BY SILENCE?

If the offeree decides to accept an offer but does not tell is this a valid acceptance? If the offeror says the offeree need not communicate the acceptance? Freedom of offeror to waive the requirement?

In this case the claimant offered to buy a horse from his nephew and told the nephew that if he heard no more from him, he would consider the horse his at that price. The nephew decided to accept the offer and told the defendant auctioneer the horse was no longer to be auctioneed, but did not tell the claimant he had decided to accept. It was held that the claimant's offer had not been accepted because the nephew had not communicated his acceptane.

A rule of silence constituting acceptance cannot be justified. This protects the offeree from accepting offers he does not intend to, such as in junk mail. Otherwise, you would have to expressly reject all offers.

SILENCE CANNOT CONSTITUTE ACCEPTANCE.

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RUST V ABBEY LIFE INSURANCE CO [1979]

C applied for a bond which she kept for 7 months before claiming her money back. It was held that her application had been an offer duly accepted by D and she therefore lost. Because she offered it was not unreasonable to view this silence as acceptance.

This is the only exception to the no acceptance by silence rule.

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BROGDEN V METROPOLITAN RAILWAY (1877)

Can you accept by conduct?

An acceptance may be inferred from conduct, provided it was clear when viewed OBJECTIVELY by a REASONABLE person - it must be FINAL AND UNQUALIFIED. Conduct will only count if there is a clear intention to accept.

In this case C submitted a draft contract for the purchase of coal from D who filled in terms and returned it marked 'approved'. D never expressly agreed to the alterations but accepted coal under the contract for two years. It was held by the House of Lords that delivery of coal was an acceptance of the defendant's couter-offer. Therefore, the counter-offer was accepted by conduct.

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BRITISH ROAD SERVICES V ARTHUR CRUTCHLEY LTD [1968

ANY AMBIGUITY IN THE CONDUCT

Does conduct as acceptance provide a possible solution to the 'battle of the forms'? Contract then performed, the final offer is performed.

Whiskey was to be stored by the defendant. The claimant's driver handed D a delivery note stating the conditions of carriage. D stamped the note saying received under D's conditions. It was held that D made the final counter-offer impliedly accepted by the conduct of C in handing over the goods.

LAST SHOT DOCTRINE!!

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LIDL UK V HERTFOOD FOODS LTD [2001]

Both negotiators knew that they had policies to contract on the basis of their own terms. And that ti would be impossible to conclude the agreement. Neither therefore applied.

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LIDL UK V HERTFOOD FOODS LTD [2001]

Both negotiators knew that they had policies to contract on the basis of their own terms. And that ti would be impossible to conclude the agreement. Neither therefore applied.

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POWELL V LEE (1908)

Who can communicate acceptance?

In Dickenson v Doods, it is suggested that the offeror need not personally communicate a withdrawal of the offer as long as it is brought to the party's attention. Is it the same for acceptances of offers?

In this case the defendant decided to appoint Powell as a headmaster. Powell found out through a member of the panel who was not authorised to disclose the decision. The panel then changed its mind appointing another candidate. Powell sued claiming his offer of services had been accepted. However, it was held to be no contract as Powell had never received official notification of his acceptance.

ONLY COMMUNICATION BY THE OFFEREE HIMSELF OR HIS DULY AUTHORISED AGENT WILL SUFFICE. Protects the offeree.

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ADAMS V LINDSELL (1818)

THE POSTAL ACCEPTANCE RULE means that the acceptance takes placethe moment it is validly posted. The rule that acceptance must be communicated TO the offeror for it to be valid is annulled. It is FROM THE POINT OF POSTAGE that a legally binding contract exists.

IN this case the defendant posted a letter on 2nd september offering to sell wool, requesting the claimant accept by post. The defendant addressed the letter incorectly and the claimant did not receive it til the 5th, then sent letter of acceptance. By 7th, defendant had not received acceptance and so sold wool to third party. but it was held that there was a contract between the two parties.

This means the offeror may have validly accepted even if the letter never reaches the offeror. The postal acceptance rule can be bypassed by the offeror however. And the rule has become less popular. If the offeree posts to the wrong adress, they have not done all they can to communicate the acceptance and so it is invalid. Not permitted when disruption to postal service.

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HOLWELL SECURITIES V HUGHES (1974)

A firm posted its acceptance which was never received. The firm argued that the Postal Acceptance Rule was effective. But the Court of Appeal held that it was not validly accepted before it terminated. The court explained that where the offer requires actual communication of the acceptance, the postal rule will not apply even though the parties contemplate the acceptance might be made by post.

The court will be willing to infer the requirement of actual communication if the postal acceptance rule will lead to unfair circumstances.

There is a general dislike for the postal acceptance rule.

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Other methods of communication

The postal acceptance rule DOES NOT APPLY TO MODERN AND INSTANTANEOUS FORMS OF COMMUNICATION. Where the method of communication is INSTATANTANEOUS, THERE WILL NOT BE ACCEPTANCE UNTIL IT IS COMMUNICATED TO THE OFFEROR. This is because the offeree can generally tell if the communication has been made effectively and will know if they need to try again and so the risk is placed on them.

If talking on the TELEPHONE, the offer will be accepted the moment it reasonably appears to the offeree that the foferor has heard and understood the acceptance. If the line goes dead then no, but if goes through to answerphone, acceptance will take effect when it would have been reasonable for them to check their messages.

With FAXES, when it would be reasonable to expect it to be checked.

EMAILS - acceptance valid unless offeree realsies email has failed to be received properly. Only valid if they could have reasonably been expected to check their invox.

If there is a FAULT with the offeror as to why they cannot check their email/phone, this has no effect upon whether it would be reasonably expected for the acceptance to be communicated UNLESS the offeree knows of these facts/change of situation.

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ERRINGTON V ERRINGTON [1952]

When is a unilateral contract accepted? One of two.

ON COMMENCEMENT OF PERFORMANCE OF THE REQUESTED ACT? The offeree accepts by commencing performance of the requested act, but promise not enforceable until performance complete? Cannot revoke offer after commencement of performance?

In this case a father purchased a house for his son and daughter-in-law to occupy. He paid a lump sum financed by a mortgage and promised that if they paid all the mortgage instalments he would transfer ownership of the house to them. He then died leaving the property to his widow. The son and daughter-in-law separated. The son moved back in with the mother but the daughter continued to pay the instalments. The widow attempted to evict her, but the Court of Appeal held that she had a contractual right to occupy the property as long as she continued to pay the mortgage instalments. The father's promise had generated a UNILATERAL CONTRACT which was binding once performance commenced, but would cease if left incomplete.

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DAULIA LTD V FOUR MILLBANK NOMINEES LTD [1978]

Is a unilateral contract accepted on completion of performance of the requested act??? You therefore do not accept the offer until performance has been completed. But between the two, there is a second collateral contract under which the offeror impliedly promises that they will not revoke the offer. The main contract would not be breached by a revocation, but the second collateral contract would be.

Is there protection for any expenditure incurred in preparing for the performance of the requested act?

In this case, the claimant sought to enforce an oral promise to sell an interest in land if they attended with a draft contract and a banker's draft. It was held that by attending D's office with these things, C had fully performed the requested act and was therefore entitled to enforce C;s promise. A unilateral offeror was said to be entitled to require full performance of the obligation imposed and must be an implied obligation for the offeror not to prevent the condition from becoming satisfied. That obligation arises as soon as the offeree starts to perform. Until then the offeror can revoke the whole thing. But once the offeree embarks on performance, the offer cannot be revoked.

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STEVENSON, JACQUES & CO V MCLEAN (1880)

WHAT HAPPENS IF THERE IS AN ENQUIRY OR REQUEST FOR FURTHER INFORMATION?

It is not imperative that the offeree's response includes a categorical yes or no decision on acceptance. Sometimes they may wish to explore details, or considerations of alternatives - NOT A COUNTER-OFFER but seeing if there is room for negotiation.

In this case the defendant offered to sell some iron. The claimant enquired as to whether he could take delivery over a period of 4 months. The defendants sold to someone else, but the claimant accepted his ofer before the defendant communicated revocation of the offer. The contract had been concluded, and they were liable for non-delivery.

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RAMSGATE VICTORIA HOTEL CO LTD V MONTEFIORE (!866)

IF THE OFFEREE DOES NOTHING, AFTER A REASONABLE LENGHT OF TIME THE OFFER WILL EXPIRE.

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BUTLER MACHINE TOOLD CO LTD V EX-CELL-O CORP (ENGL

A rejection kills off the offer. Ay response which proposes a change of term constitutes a rejection of the original offer and is a new offer in itself. A REJECTION OR COUNTER OFFER MUST BE COMMUNICATED TO TAKE EFFECT.

The battle of the forms.

In this case, the claimant sellers offered to delvier a machine tool on their terms set out in a quotation, including a price escalation clause. The defendant buyers replied giving an order differing from the sellers quotation and stating that the order was on the buyer's terms and conditions with NO price escalation clause. The order contained a tear-off slips for the claimant to sign stating that it would be on the buyers terms. The sellers returned the completed slip with a cover letter stating that it would be on their terms. When the machine was delviered, the claimant sought to rely on the price escalation clause, but the Court of Appeal unanimously held that he could not, because the contract had been concluded on the buyers terms due to the rip-off sheet that had been signed. The last shot approach.

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THE SATANITA [1879]

A yachting regatta. Eah yacht owner entered a race signing a letter providing for the payment of damages by any yacht infringing the rules and foul of any yacht. The Satanita sank the Valkyrie. It was held that there was a contract between the two yacht owners even though there was no clear offer and acceptance between the two.

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THE EURYMEDON [1975]

Were stevedors liable to the owner of cargo for damage they had caused in unloading? They relied on an exemption clause between the cargo owner and the carrier, where the benefit of the clause was said to extend to the stevedores as their agent. It was held that when the carrier contracted with the cargo owner they entered into the main contract of carriage, and so a second contract was created where the stevedores got the benefit of the exemption clause.

SOMETIMES THE RULES OF CONTRACT LAW ARE BENT TO REFLECT COMMERCIAL REALITY.